Saudi project cuts weigh on Gulf index

27 September 2015

Gulf Projects Index down from peak as Saudi Arabia contracts by 2 per cent

The Gulf Projects Index has fallen 0.5 per cent in the week ending 18 September, down $17bn from its peak of $3470bn.

This is due to a 2 per cent week-on-week fall in the value of Saudi Arabia’s projects market, the region’s largest. The $24.5bn fall came as Riyadh reviews its project spending and considers cutting non-essential projects and scaling back spending on others.

In numbers

$24.5bn week-on-week contraction in Saudi Arabia’s projects market

3.9 per cent Saudi Arabia project market year-on-year growth

$5bn budget for new Kipco real estate project in Kuwait

The kingdom’s year-on-year growth rate has slipped to 3.9 per cent, down from double figures earlier in 2015. A sharper slowdown is now expected for 2016 and 2017, according to regional projects tracker MEED Projects.

The bright spot is in the utilities sector, where a $3bn integrated solar combined-cycle power plant is planned in Taiba.

Project updates this week
 Project nameProject status
Bahrain Al-Areen masterplanExecution
KuwaitDaiya mixed-use real estate projectStudy
OmanOman National Railway: segment 4A – Haima-AmalPrequalification
Saudi ArabiaSafaniyah Field ppgradation: phase 2Execution
Saudi ArabiaTaiba integrated solar combined-cycle power plantMain contract bid
For further information visit www.meedprojects.com/home

Kuwait saw its projects market expand by 2.1 per cent, or $5.1bn. The main driver for the increase was the announcement of a $5bn real estate development by Kuwait Projects Company.

Bahrain grew 1.3 per cent as a result of private real estate projects, while Iran saw a 0.6 per cent rise in the value of its projects market as it plans out its post-sanctions investment programme.

Upcoming tender deadlines
 ClientContractSubmission date
UAEDubai Electricity & Water AuthorityHassyan 400kV substation30-Sep
QatarKahramaaPhase 13 transmission and distribution programme01-Oct
UAEDubai MunicipalityJebel Ali sewage treatment plant18-Oct
Saudi ArabiaSaudi Electricity Company/Saudi AramcoFadhili independent power project01-Nov
UAERoads & Transport AuthorityRoute 2020 metro extension06-Dec
For further information visit www.meed.com/news/tenders

Qatar’s market grew 0.2 per cent due to continued investment in the transport sector. However, year-on-year growth remains the lowest in the GCC, at 2.6 per cent, as World Cup infrastructure and leisure schemes get under way, and post-tournament plans remain unclear.

In the UAE, the projects market held steady despite $3bn in new schemes, mainly in the real estate sector. Project completions and inactive schemes cancelled out the gains, although the market is still up 13.9 per cent year-on-year.

Iraq’s index fell another 0.1 per cent on delayed housing projects as Baghdad struggles to cover its budget deficit.

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